Gents,
Robert, thanks for the kind remarks. I have been on sabbatical per force and was stretched to keep up with the posts and the news at all. But things are settling down now a bit. SEG is still my favorite and I am in total agreement with you about wanting them to continue to turn up the heat. I still believe it is the right course. I would also be surprised if anyone (some rich guy) bought one of the laggards. You could not give me WD right now. Or RDRT, or Komag, or Trace, or HMTT, or Maxtor. So keep on keepin on SEG. As Paul likes to quote Dante's Inferno I will as well: "Cry havoc and let slip the dogs of war". I am a fan of MBA's from the Yahoo thread but believe he is dead wrong on this one. Seagate can apply enough pressure IMO to bury the competition, but not at a tremendous loss. Fact is SEG is the 800 lb gorilla that is getting positively svelte. Can't say much about it but I have had my nose buried in a SEG supllier for the last 5 weeks. Nose? Actually I mean heart, soul, and body. I have had a first hand chance to see how SEG is executing on several of their 5 primary initiatives: called "Supply Chain management", and it is something to see. These guys are literally teaching suppliers how to be lean and mean as well. For sure they are holding them to extraordinary performance levels but they are doing so by leading instead of flogging.
Re: the layoffs. It likely will not be just Singapore. I think Seagate has decided that China is a mistake from a logisitics point of view. Wuxi is propped up with scads of ex-pats from Singapore. I think it will go bye bye. Automation initiatives (another of the 5 primary initiatives at SEG) is cutting into some tasks (as Sam already figured out). Lowered demand this quarter is cutting a bit as well. The older Tuas media facility will likely be gone by year end. One of the other primary initiatives (common platform) will take em out. You don't need a low end media facility if you use the same high end disk but fewer for your desktop products. And here is a point: The industry has now reached a point in areal density where the sump market of using older technology to make cheap desktop drives is unneccessary. It is fairly simple arithmetic. You use a single platter (or even one side of one with one head) for the internet-newbie-starter-kit variety of disk drive. It is simpler and cheaper, cuts the top assembly line items in half or more, gets everyone in tune, and hums, literally hums along. SEG is leading this charge but even Maxtor and Quantum have seen the light. I think it is a major game plan shift if not a "paradigm" shift. Look for average number of heads (and platters) to go way down. About 20% so far this year alone, another 30% or so next year. Bad news for the already stung independent component guys especially as everyone learns the new math.
Summary: Seagate is locked and loaded. They are really something to see. Im buying. And I MUST be right if Paul is interested again. By the way, I think Gottfried is joking. He is a DD junkie anyway.
One question for you, whats with the eagerness to raise even more cash? Any guesses?
P.S. You still holding the patch?
Best,
Stitch |
